Long-time NSW premier Neville Wran has died at the age of 87 after a long battle with dementia.

Mr Wran, the Balmain boy who won power in NSW in 1976 and remained the state's premier for the next decade, died about 6pm on Sunday night at the prestigious Lulworth House nursing home in Elizabeth Bay, where the 97-year-old former Labor prime minister Gough Whitlam is a resident.

His oldest daughter from his first marriage, Kim Wran, had arrived from Los Angeles to be with her father on Sunday morning.

"I saw him every day last week," said Ms Hickson. "It has been a long, slow process."

Mr Wran had been suffering from dementia for the past two years.

"This is of course a very sad time for us all, but in fact a blessed release for Neville," Ms Hickson said.

"Dementia is a cruel fate and I have been grieving the loss that comes with it for some years. But I hope now, especially in this political climate, people will join me in celebrating the life of a great man, a true political hero."

She paid tribute to the nursing staff of Lulworth House who had been caring for the former premier.

"They really are angels," she said.

"I would like his farewell to be very significant and a real celebration of the people who admired him," Ms Hickson said.

"I want it to be open to all – a people's farewell. I want it to be joyous and celebratory as was everything to do with him – exciting and worthwhile."

Mr Wran's daughter Kim said she was incredibly grateful to "share the last day of his life with him".

"He was a wonderful man and father. We had a wonderful childhood, he was a wonderful grandfather. He made us proud, he made us laugh and I just can't imagine life without him."

She said her father may have contracted pneumonia in the past few weeks and had "laboured breathing" on Saturday. "But he wasn't in any pain today."

Former NSW premier Bob Carr described Mr Wran as possessing an "astute reading of public opinion" and a "vivid and earthy understanding of the political process".

"He showed Labor the way back into government after the huge defeat suffered by Gough Whitlam in 1975," Mr Carr said.

"He delivered a moderate and stable government and was rewarded with landslide victories. He edged new issues into public debate: anti-discrimination laws, access for ethnic communities, and above all environmental protection – his greatest achievement being the protection of the rainforests of northern NSW. This fusion of the Labor and environmental agenda was to have a big influence on me, not least because I was honoured to serve him as minister for planning and environment."

Prime Minister Tony Abbott also remembered Mr Wran as ‘‘one of the most significant figures of his generation’’.

‘‘Among his achievements as premier, he orchestrated the redevelopment of Darling Harbour and built the Sydney Entertainment Centre,’’ Mr Abbott said in a statement.

‘‘Neville Wran made his mark on NSW and Australia.’’

Malcolm Turnbull, the godfather of Mr Wran's son Hugo, said: "Lucy and I are very sad to learn of Neville's death. He was a very dear friend. We were all in business together for over a decade. He is a remarkable man and one of our greatest political leaders.

"In many ways he was the architect of modern Sydney. He was an example of a very activist premier. His style of leadership was very different to the Labor leaders that followed him, who were as successful as Neville at winning elections but were not builders and doers in the way he was. "Although his last years have been tough, he did live to a great age. It's very sad. We will miss him."

He said Mr Wran had the capacity to be the "sage older man" but was simultaneously "young at heart, innovative and mischievous. He was always the best company, erudite, wickedly funny, but never, ever self important."

Mr Wran's business partner Albert Wong, who had known the former premier for the past 30 years and was in business with him from 2004 to 2011, said the pair shared a "unique" relationship despite their age difference.

"He was almost like a second father to me and in the latter years we were very close friends and business partners," said Mr Wong. "He taught me a lot and I shall miss him greatly. I feel very privileged to have known him."

NSW Premier Mike Baird said he was "deeply saddened" to learn of his death.

"In the 1970s and 1980s Mr Wran was a towering figure in the NSW Labor Party and in the state. His legacy is positive and lasting.

"Mr Wran's achievements in infrastructure include electrification of several regional rail services and the establishment of the Darling Harbour precinct.

"Many features of democracy in NSW, such as four-year terms, public funding and disclosure laws, and a democratically elected Legislative Council, bear his imprint."

21 Apr
He gave a lot away in a talk when I was stumbling in my first years as Premier. We stood in the sun at Greenwich to witness harbour-side land being handed over for public park, one of his pet enthusiasms. He looked at the crowd and gave me advice: “They’re all happy … that’s the secret. Just give them what they want – it’s easy.” Later he said “Think about that day at Greenwich. Sure they’re never satisfied but who cares? Forget the budget, just spread bread on the waters.”